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Coalition of Cities Stunned by Judge's Rejection of Diablo Settlement

Post Date:11/10/2017 3:30 PM

A state judge has recommended the California Public Utilities Commission reject a carefully negotiated agreement which would help the County of San Luis Obispo, local cities and San Luis Coastal Unified School District manage economic fallout in the wake of PG&E’s plans to close Diablo Canyon Power Plant. Administrative Law Judge Peter V. Allen’s recommended ruling is part of a 71-page proposed decision received early Wednesday by members of the Coalition of Cities. In his proposed decision rejecting the settlement, Allen cited a lack of statutory basis for ratepayer funding of this type of settlement.

The Coalition, created in 2016 to address the closure of Diablo Canyon, represents the cities of Atascadero, Arroyo Grande, Morro Bay, Pismo Beach, Paso Robles and San Luis Obispo. Coalition members, in coordination with the County and the School District, negotiated a settlement agreement that provided accountability to our local communities through economic impact mitigation as part of the plan to close Diablo Canyon Power Plant.

According to Derek Johnson, City of San Luis Obispo City Manager and spokesperson for the Coalition of Cities, the decision is a stunning setback to local communities. “We worked to reach an equitable agreement to help our communities manage the loss of Diablo Canyon,” said Johnson. “The agreement we reached with PG&E is founded in fundamental fairness and sound legal and policy considerations.” Johnson added that it is appropriate for ratepayers to share in funding the economic mitigations. “For nearly 30 years our communities supported and incurred the risks of a nuclear power plant operation that benefitted users throughout the state. Those users will also benefit from the storage of nuclear waste in our community for the foreseeable future. It is only fair to ask those same users to participate in the impact mitigation costs of the operation’s closure,” he said. 

The proposed $10 million in Coalition funding would provide for economic development efforts to support job creation and business development needed to offset the losses created by plant closure.    

Johnson pointed out that the potential funding impact on individual ratepayers is negligible, while the cost to the local communities is potentially devastating. “Diablo Canyon represents $1 billion in annual economic impact,” said Johnson. “That kind of loss cannot be borne solely by our residents.” Johnson said that Allen’s denial will deprive the impacted communities of economic mitigation for the closure’s significant adverse impacts on education, public safety and emergency services.

The finding will be reviewed at a California Public Utilities Commission public hearing slated for November 28 in San Francisco. “We will be there to advocate for our residents and urge the CPUC to do right by our communities,” said Johnson.  

Derek Johnson, San Luis Obispo City Manager

Christine Dietrick, San Luis Obispo City Attorney                                            

(805) 781-7114